Retail Trading Giant Robinhood To Enable In-App Swaps on the Ethereum Network for More Than 200 Crypto Assets

September 1, 2023 The Daily Hodl

Robinhood bought back Sam Bankman-Fried’s stake from US govt for $606M

September 1, 2023 Coin Telegraph

<div>Robinhood bought back Sam Bankman-Fried's stake from US govt for 6M</div>

Bankruptcy

The purchase of the 55 million Robinhood shares had been expected following approval from the company's board and a U.S. district court.

Cryptocurrency and stock trading platform Robinhood has announced the purchase of more than 55 million shares of the firm previously held by former FTX CEO Sam Bankman-Fried.

According to an Aug. 31 blog post, Robinhood completed a purchase of 55,273,469 shares for roughly $606 million following a filing with the United States Securities and Exchange Commission (SEC). The shares, originally held by Bankman-Fried and FTX co-founder Gary Wang through Emergent Fidelity Technologies, were seized in January by the U.S. Department of Justice.

The purchase had been expected. Robinhood’s board of directors announced the approval of the deal in the company’s Q4 2022 report, and an Aug. 30 SEC filing said the U.S. District Court for the Southern District of New York had approved the purchase “free and clear of any claims, interests, liens and encumbrances”.

“We are happy to have completed the purchase of these shares and look forward to executing on our growth plans on behalf of our customers and shareholders,” said Robinhood chief financial officer Jason Warnick.

This is a developing story, and further information will be added as it becomes available.

Robinhood Revealed As Third Biggest Holder of Bitcoin With Massive $3,066,222,950 BTC Stash: Arkham Intelligence

August 28, 2023 The Daily Hodl

Robinhood accumulated $3B in Bitcoin in 3 months — What does this mean for markets?

August 25, 2023 Coin Telegraph

Robinhood accumulated B in Bitcoin in 3 months — What does this mean for markets?

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Robinhood’s Bitcoin holdings could reshape the crypto landscape by supercharging the influence of retail investors and possibly creating new market risks.

In a swift and intriguing turn of events, a previously enigmatic Bitcoin (BTC) address managed to catapult itself to the esteemed position of the third-largest holder of BTC. As reported by Cointelegraph on Aug. 22, the address in question accumulated a staggering 118,000 BTC.

While its identity has now been attributed to Robinhood, questions still linger, as the financial giant has neither confirmed nor denied these allegations. Some on-chain analysts posit that the stash actually belongs to MicroStrategy, the U.S. business intelligence and analytics software firm, which holds 152,800 BTC, as per their recent submission to the U.S. Securities and Exchange Commission.

Is TradFi dethroning crypto-focused intermediaries?

Should Robinhood's ownership of the 118,000 BTC be validated, the consequences could reverberate across the cryptocurrency landscape. Traditionally, the largest Bitcoin addresses have predominantly been linked to crypto-native exchanges. However, Robinhood's role as a conventional broker focused on equities and options sets an intriguing precedent.

A glance at Robinhood's latest 10-Q filing reveals that they held $4.24 billion in Bitcoin. Given Bitcoin's price neared $30,500 on June 30, this equates to approximately 139,016 BTC – a fact that aligns seamlessly with the on-chain analysts' contentions regarding Robinhood's substantial crypto holdings.

If Robinhood is the owner of the “mystery” Bitcoin address, this makes one point pretty clear. Bitcoin doesn't rely on big institutions to succeed. Analysts used to argue that for Bitcoin to really take off, more big investment firms or companies like Tesla and Block Inc. needed to get on board. But those hopes fizzled out as recent reports from Apple and Alphabet (Google's parent company) revealed they hadn’t taken the Bitcoin plunge after all.

RegardingRobinhood, reports say that by June 2023, they had around 23.2 million active users. If just 10% of them owned some Bitcoin, they would need an average of about $1,828 each to reach the reported $4.24 billion in Bitcoin holdings. This goes to show that regular people, like those on Robinhood, can actually play a significant role in shaping the cryptocurrency landscape.

The downside of Bitcoin being held by Robinhood

While some investors want Bitcoin mass adoption by any means possible, getting there is not without risk. Robinhood's user base is known for their penchant for speculative trading notably in meme stocks like AMC, GameStop and Bed Bath & Beyond. These traders also boast substantial holdings in Dogecoin (DOGE) – amounting to a staggering $2.63 billion.

Their propensity for short-term investments raises questions about their approach to Bitcoin. If these investors purchased BTC in anticipation of U.S. spot-based ETF approval, the prospect of a prolonged price decline or delayed approval might trigger mass sell-offs.

Furthermore, a more remote yet conceivable risk emerges from the possibility of U.S. government intervention. Although the probability of a scenario akin to the 1933 Executive Order 6102, which mandated private gold holdings be exchanged for paper currency, seems slim, potential actions by U.S. authorities could potentially jeopardize these holdings.

Even in the unlikely scenario where the U.S. justice system or the IRS opts to lock down those assets while they investigate users for tax or similar issues, the substantial stash of Bitcoin held by Robinhood only amplifies the potential risks. The expansive pool of assets held by Robinhood heightens the risk of such actions affecting a larger portion of the market.

Paradoxically, this vast accumulation of cryptocurrency holdings by Robinhood clients could potentially serve as ammunition for ETF applicants. While offering a comparable service, Robinhood's potential lack of investor protections could incentivize the establishment of more secure and regulated ETFs.

The newfound prominence of Robinhood in the cryptocurrency sphere underscores the ever-evolving nature of the market. Whether or not spot Bitcoin ETFs materialize, investors will find alternative avenues to enhance their exposure to cryptocurrency, be it through MicroStrategy shares, Robinhood, or other innovative means. This adaptability aptly demonstrates that in the realm of finance, innovation and progress are inevitable – much like nature's unyielding drive to find a way.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Robinhood turns profitable in Q2, but crypto revenue declines

August 2, 2023 Coin Telegraph

Coin Telegraph

Robinhood achieved profitability for the first time since becoming a public company in the second quarter of 2023. Its crypto revenue, however, continues to decline.

Robinhood released its second-quarter results, achieving profitability for the first time since becoming a public company, despite a drop in revenue in the second quarter of 2023.

According to its quarterly report released on Aug. 2, Robinhood’s revenue from cryptocurrency transactions shrank by 18% to $31 million. Other transaction-based revenues dropped as well, including options, which decreased 5% to $127 million, and equities, which declined 7% to $25 million. Over the past year, its revenue has decreased by 4% from $202 million in June last year to $193 million.

In spite of the decline in revenue, the company recorded a net income of $25 million, or earnings per share (EPS) of $0.03, compared with a net loss of $511 million, or EPS of -$0.57, in the first quarter of the year. The result is attributable to improvements in total operating expenses over the past few months, with a midpoint decrease of $45 million.

*Robinhood's Q2 2023 results. Source: Robinhood*

Earnings before interest, taxes, depreciation and amortization (EBITDA) increased 31% sequentially to $151 million, with its margin gaining five points to 31%. EBITDA is often used by analysts, investors and financial professionals to compare the operational performance of companies in the same industry.

The total assets under custody increased 13% to $89 billion last quarter, driven by “higher equity valuations and continued net deposits." Taking the first half of 2023 into account, Robinhood slightly increased its crypto assets under custody from $8.431 billion in December 2022 to $11.503 billion in June 2023.

“In Q2, we reached a significant milestone by achieving GAAP profitability for the first time as a public company,” said Vlad Tenev, CEO and co-founder of Robinhood Markets.“ Generally accepted accounting principles (GAAP) refers to the standard accounting principles and guidelines that companies use to prepare their financial statements.

Robinhood’s net deposit was $4.1 billion in the quarter, which translates to an annualized growth rate of 21% relative to assets under custody in the first quarter of 2023. Over the past 12 months, net deposits were $16.1 billion, indicating a growth rate of 25% over a year.

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Crypto-friendly Robinhood inches to UK with local CEO appointment

July 25, 2023 Coin Telegraph

Coin Telegraph

Robinhood has been planning expansion into the United Kingdom since 2019 but the project has faced multiple delays.

Cryptocurrency-friendly trading platform Robinhood is moving forward with plans to launch services in the United Kingdom with a new major local appointment.

Robinhood has appointed former Barclays executive Jordan Sinclair as the new CEO to run its United Kingdom entity, according to data from the Financial Conduct Authority.

According to FCA, Sinclair was approved by the authority to perform the CEO role at Robinhood’s U.K. arm on July 18.

Prior to joining Robinhood, Sinclair was a managing director at the European fintech Freetrade for 13 months, according to his LinkedIn profile. The new Robinhood’s executive also worked as director of group strategy at the financial firm Barclays and corporate banker at Wells Fargo.

The latest hiring comes in line with Robinhood’s long-running plans to launch a platform in the United Kingdom. Robinhood’s U.K. expansion has been rumored since at least early 2019 and has been delayed multiple times. In April 2022, Robinhood renewed the expansion plans by acquiring the British crypto firm Ziglu.

Local reports in mid-July suggested that Robinhood started the process of hiring key executives for its U.K. business. The firm reportedly expects to launch its service in the U.K. by the end of 2023.

Robinhood’s entrance to the U.K. comes amid the United States’ regulators continuing to scrutinize major cryptocurrency firms. The U.S. Securities and Exchange Commission is currently running multiple cases related to crypto firms in the country, including companies like Coinbase, Ripple, Binance.US and others.

As a major crypto platform in the United States, Robinhood also faced some action by the SEC this year. In February, Robinhood Markets received an investigative subpoena from the SEC over its digital asset business’ crypto listings, custody and platform operations. In June, Robinhood announced plans to cease support for coins like Cardano, Polygon and Solana after the SEC labeled them as unregistered securities.

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Ark Invest sells more Coinbase shares, eyes Meta platforms, Robinhood

July 15, 2023 Coin Telegraph

ARK

Cathie Wood, the Bitcoin advocate, is actively investing in Meta Platforms (META) and Robinhood Markets (HOOD) shares.

As the stock price of Coinbase (COIN) reaches a 52-week high, Ark Invest, the investment management firm led by Bitcoin (BTC) bull Cathie Wood, has recently divested more of its Coinbase shares.

Following Ark Invest's significant acquisition of Coinbase shares during the bear market, the investment firm has recently sold off a portion of its Coinbase holdings for the second time this week. In the meantime, Cathie Wood, the prominent Bitcoin advocate, is actively investing in Meta Platforms (META) and Robinhood Markets (HOOD) shares.

Trade information observed by Cointelegraph reveals that on July 14, Cathie Wood's Ark Invest funds divested a total of 478,356 Coinbase (COIN) shares valued at $53 million, coinciding with the stock's yearly high of $114.43.

*Screenshot of ARK Invest trading notification. Source: ARK Trading desk.*

In the transactions, Cathie Wood's flagship fund ARK Innovation ETF (ARKK) divested 263,247 COIN shares, ARK Next Generation Internet ETF (ARKW) sold 93,227 COIN shares, and ARK Fintech Innovation ETF (ARKF) offloaded 35,666 COIN shares.

In June, Cathie Wood initiated the purchase of Meta Platforms shares after the company announced the launch of "Threads," a social media app similar to Twitter. ARK Innovation ETF (ARKK) acquired 69,793 META shares, while ARK Fintech Innovation ETF (ARKF) purchased 111,843 shares of Robinhood. Additionally, ARK Next Generation Internet ETF (ARKW) increased its holdings with 12,559 META shares and 169,116 Robinhood shares.

As per CoinMarketCap, the closing price of COIN stock on Friday stood at $105.31, experiencing a 1.58% decline as investors secured their profits. During the week, COIN price surged by 33%, reaching a 24-hour high of $114.43, and displaying an impressive year-to-date increase of 213%. In addition to the overall upswing in crypto-related stocks, Coinbase witnessed a notable rise following the summary judgment in the US SEC v. Ripple lawsuit.

Cathie Wood’s ARK Innovation ETF (ARKK) sold 135,152 Coinbase (COIN) shares worth $12 million on July 11 and ARK Fintech Innovation ETF (ARKF) sold 160,887 Coinbase (COIN) shares in March.

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Robinhood to axe 7% of full-time staff in latest round of layoffs: Report

June 27, 2023 Coin Telegraph

Coin Telegraph

Roughly 150 full-time employees are being laid off, according to internal company messages.

Online brokerage firm Robinhood Markets will reportedly lay off roughly 150 full-time staff — 7% of its total workforce — in its third round of layoffs in just over a year.

According to an internal company message seen by The Wall Street Journal, Robinhood Chief Financial Officer Jason Warnick reportedly wrote that the cuts were being made to “adjust to volumes and to better align team structures.”

A Robinhood spokesperson did not confirm or deny the layoffs in comments to Cointelegraph, but stated:

“We’re ensuring operational excellence in how we work together on an ongoing basis. In some cases, this may mean teams make changes based on volume, workload, org design, and more.”

The reported layoffs come just five days after Robinhood acquired credit card firm X1 in a $95 million deal. Last year, Robinhood cut its total headcount by 9% in April and let go of 23% of its remaining staff in August as a decline in trading activity and subdued prices of equities and cryptocurrencies saw profit margins shrink.

The two cuts accounted for the loss of more than 1,000 staff.

At its peak in the second quarter of 2021, Robinhood boasted 21.3 million active users and more than $565 million in revenue. Things have soured for the brokerage firm of late, with Robinhood’s Q1 2023 results showing a 44% decline in monthly active users and a 30% year-over-year decline in revenue.

*Transaction-based revenues since Q1 2021. Source: Robinhood*

Robinhood shares are currently changing hands for $9.63, up 18% for the year despite having fallen more than 82% from its all-time-high, notched in August 2021.

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Robinhood buys credit card fintech X1 for $95M

June 22, 2023 Coin Telegraph

Robinhood buys credit card fintech X1 for M

Coin Telegraph

In 2022, X1 claimed to have 500,000 people on its waiting list for a credit card. Over the past two years, the startup has raised $62 million from venture capital firms.

Crypto and stock trading app Robinhood has taken a new step to diversify its business portfolio by acquiring the credit card startup X1 in a $95 million deal. The fintech firm offers an income-based credit card with rewards, along with free trial and single-use credit cards.

The deal is expected to be closed by the end of September, Robinhood said in a statement on June 22, adding that the move was “an important step” to a deep relationship with its existing customers.

Robinhood, which already offers debit cards to its customers, gains a new revenue stream with the acquisition. In a press release dated July 18, 2022, X1 reported $50 million in monthly volume and was expecting to reach $1 billion in annualized spend at year’s end.

Announcement incoming We’re acquiring @x1creditcard, a platform that offers a no fee, stainless steel credit card with rewards on every purchase, and an intuitive mobile app experience. This is an important step toward serving all of our customers' financial needs. More info:… pic.twitter.com/VCUjBxkpsM
— Robinhood (@RobinhoodApp) June 22, 2023

According to Robinhood’s latest earnings report, its monthly active users base fell from 16 million in the first quarter of 2022 to just under 12 million over the same period this year. The company also saw a 30% revenue decline year on year for its crypto trading business, with $38 million in crypto trading revenue in Q1 2023, down from $54 million in Q1 2022.

The fintech is Robinhood’s fifth acquisition in four years, according to Crunchbase. In 2019, the company acquired the daily financial newsletter MarketSnacks, followed by three deals in 2021 — the cross-exchange crypto trading platform Cove Markets, the hiring firm Binc and the shareholders’ platform Say. Before the crypto winter broke out, Robinhood acquired the United Kingdom-based crypto asset firm Ziglu in April 2022.

X1’s current valuation is unknown, but the company claimed to have 500,000 people on its waiting list for a credit card in 2022. Since 2020, the startup has raised over $60 million from venture capital firms such as Craft Ventures, Soma Capital and FPV, the venture firm of Google Analytics co-founder Wesley Chan, who is also an investor in Robinhood and financial services company Plaid.

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Trading Giant eToro Halts Purchases of Polygon (MATIC), Algorand (ALGO) and Two Other Altcoins Amid SEC Crackdown

June 14, 2023 The Daily Hodl

robinhood